Dear Friends! It is a known fact that diesel has become the fuel of choice for a majority of Indian customers. This is evident from the fact that the overall sales figure of diesel cars which stood at a mere 5% about a decade ago now stands at a mighty 40% of the overall cars sold and is increasing at a faster pace than ever.

However, anyone who is out to buy a car is faced with the perennial question on whether to buy a petrol car or go in for a diesel. Which option would provide more value for money in the long run? To arrive at an answer, we would have to look deep into a buyer's behaviour in the Indian context. Some of the things we look at while purchasing a car are:

Overall price (price, discounts, freebies etc.)

Looks and engine power

Fuel efficiency

Features (aircon, ICE, safety features etc.)

Cost of service and spares

Coming down to the topic on whether your usage justifies buying a diesel car, we can simply do some maths to arrive at a probable solution. For the purpose of calculation, we would make the following assumptions*:

Standard average life span of the car - 7 yrs (One would typically sell/ upgrade to a new car post this)

The above high level calculation proves that as far as price is concerned, if your monthly running is below 1000 kms, it is not worth spending on a diesel engine car. Anything above 1000 kms/ month would provide you with fuel costs savings but would subsequently inflate your service costs as well.

Now comes the question of engine power and refinement; where petrol provides a more linear and refined performance, modern diesels typically being turbocharged, provide a lot of torque once revved beyond a certain rpm range.

Conclusion: Go for a diesel only if you would be putting on a lot of miles on your odometer; otherwise, a petrol makes better sense anyday.

Thanks for this Hersch. Thats some useful info there. Can help anyone who is debating between choosing between a petrol and a diesel. One thing I thought I may add. Diesel is right now at Rs. 46 a litre as against what you have commented it being 41

Great calculation @Hersch but you've missed out the most important point - resale value. The resale value of most petrol cars plummets the moment they leave the showroom whilst diesels depreciate far less. If you take this into account then a diesel makes more sense than a petrol car even before it leaves the showroom

Agree with 325i. Petrol cars depreciate like stink these days. They lose out as soon as they are driven out of the showroom. Infact the resale values of used petrol cars have sank and make a good proposition for those who want to buy a good used petrol car. But overall diesel works these days even if you dont drive that much daily

First of all, many thanks for appreciating the effort. It is very heart-warming to see that you all liked the post.

There is no doubt that a diesel car would get you a better resale in today's scenario. But go around 6-7 years back, things used to be absolutely opposite than what they are today. Diesel cars can today fetch a good resale primarily because of the cost of fuel being low.

But what needs to be kept in mind is that at some point in time in the near future, the price of diesel fuel would also get deregulated just like petrol. Even if not completely deregulated, they would surely see some major increment. In such a scenario, we would need to ask ourselves if a diesel car would be more beneficial compared to a petrol. To speculate an answer is something really hard at this juncture but there would certainly be a shift in customer preferences as and when such a thing happens.

Another aspect to notice is that diesel technology has really advanced over the last couple of years and the advent of common rail and turbo charging technology has really answered the big question marks on diesel performance to a very large extent. If things go this way, the day is not far away when diesels would also deliver a similar refinement (sans any clatter) as that of petrol.

Same is the case with petrol, where companies like Ford are planning to bring in smaller capacity turbo-charged petrol engines having performance characteristics of a larger engine but the fuel sipping habits of a smaller displacement engine. A prime example is that of the award winning Ford ECO-Boost engine planned for the Ecosport scheduled to be launched later this year or early next year.

In the end, we the customers have all the reasons to rejoice.

@CarCrazyASTL: The total landed cost would be the cost of the car + the total interest paid (in case of a car loan). Since almost 80% of the cars sold in India (or maybe even over 80%) are financed, it is prudent to not only look at the On Road Price but the overall outgo from the pocket.

As for now, I feel that both Petrol and Diesel would offer good value depending upon personal taste and preference. For customers who do not wish to shell out more from the pocket initially (less capex), a petrol would make more sense. For customers who are willing to shell out more initially but pay less subsequently on a monthly basis, a diesel would be just right. There are some really good options for both fuel types available in the market to cater to everyone's taste.

So best is to test drive and see which one tickles your senses more... Happy and Safe Driving!

Lets not forget the higher resale price of a diesel..
Also cost of maintenane is not double for a diesel

Diesel prices increased by Rs. 5/ ltr across the country. This was exactly the point I was trying to make. Diesel would certainly loose its sheen if the prices get deregulated. It would also skew the prices of diesel cars in the resale market. Moreover, we do not buy our cars for the purpose of selling but for using it.

Also, if you look carefully at the calculation above, you would notice that while a Diesel car would cost more to service, the service interval is comparatively longer as compared to a petrol. Hence, there is a differential but not to a very large extent.

What a good write-up. Covering most of the factors! Keep it up.
As the diesel prices in India have gone up by 5 bucks, last week, the calculations have changed and have showed the differences. The diesel prices will go up by Rs.2.20 in the coming months when the heat subsides. Its not in the hands of the government. They are helpless to a great extent. India imports more than 80% of oil and due to the uneasy tension in the gulf there are taxes levied there itself. Here in Canada, the prices varies everyday. In India too, let the prices become stable and maybe, deregulated, and then the up and down will become an everyday affair which people will stop looking into nor make a fuss about it,

-- A developed nation does not have the poor travelling by cars, but the rich using public transport... --

@ driftpunk: Thanks for appreciating the work! You are absolutely right as India cannot afford to subsidise fuels in current global conditions. We have an ever growing fiscal deficit and the fuel subsidies only add a major chunk to the same. However, our governament needs to put steps into place to ensure that public transport gets some sort of subsidy to keep the tariffs in reach of the common man. This would also promote usage by prompting a large chunk of population to move to public medium of transport instead of using personal cars. Our transport policy should also encourage and incentivise manufacturers to develop alternate fuel and hybrid models.

I bought a used Honda Civic AT and converted it to CNG (Lovato Sequential Kit) last week. Gives me a range of 150 km for 300 rupees of CNG. For a car of it's girth, and an automatic at that, alongwith a 1.8 litre engine that is not known to be very efficient, this makes for the perfect city car. The aircon is the best I have ever experienced, the car looks a million bucks and also drives extremely well. Full paisa vasool. I'm a proponent of the CNG bandwagon since it's cheap, doesn't pollute the atmosphere and is available freely around where I live.

@evoX and Hersch: I really do not think a petrol car costing 8.5 lacs takes Rs 5000 of servicing every 5000 kms!! Isn't that on the higher side?
A petrol car is due for servicing every 10,000 kms or one year whichever comes first. And typically, the service costs won't be more than 7-8k.. So in actuality, the calculation for overall ownership cost of the vehicle will go down from the 20.20 lacs you have calculated above.
Also, diesels also have a service interval of 10-15k kms. But I agree that the service costs will be much more than petrols.

Hersch: you have mentioned that a petrol cars' repair costs will be 75k while that of the diesel will be 1.5 lacs.. I feel thats a little far from reality. In 7 yrs, a car will typically have its suspension changed which itself costs around 30-50k. Other maintenance costs will also include a tire change. So the effective costs of ownership will go up considerably is what I feel...

But you have done a great job here to sum up all the calculations a prospective buyer should be looking at when buying a new car. All the figures may vary considering the segment they would be looking at. But these calculations do show a fair picture to compare a Diesel Vs Petrol.

I am also considering a new car and my decision leans towards a diesel. My daily run is ~50 kms + ~100 kms on weekends. But, considering I will keep my current car, this running will be divided.